A research study forthcoming in The Accounting Review measures how effective the Securities and Exchange Commission is at detecting financial misreporting.

The SEC Division of Corporation Finance reviews the financial filings of publicly traded corporations and, at times, sends comment letters to companies if it has questions about perceived deficiencies in a filing. In his study titled “Examining the Examiners: SEC Error Detection Rates and Human Capital Allocation” Assistant Professor Matthew Kubic from the University of Texas at Austin analyzed 13,429 comment letter reviews between 2004 and 2014.

In 1,829 of the cases, the comment letter review covered an annual or quarterly financial filing that was eventually restated, implying that the SEC could have detected the error in their review. Kubic then examined the nature of

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